Foreign Ownership Rules in Cambodia Under the Law on Investment

Cambodia is one of the most liberally economic countries in Southeast Asia when it comes to Foreign Direct Investments (FDIs). Cambodia is one of the top countries in Asia-Pacific (#9 overall) in the Greenfield FDI Performance Index in 2025. This indicates a massive volume of new business projects entering the Kingdom is significantly higher than what would be expected for an economy of its size.

However, not all sectors in Cambodia are open to foreign investment. There are specific strategic areas where the government maintains control through a “negative list” and constitutional restrictions. Before you start a company in Cambodia, you need to understand where you can and can’t invest as well as how to navigate these restrictions.

Legal Framework for Foreign Ownership in Cambodia

Foreign ownership in Cambodia is governed by a Negative List under Sub-Decree No. 111 (2007) (amended by Sub-Decree 139). This Negative List allows you to participate in all sectors as a foreigner except those that are prohibited or restricted. 

This list provides the regulatory detail for the 2021 Law on Investment. It established a “one-stop service” through the Council for the Development of Cambodia (CDC), drastically reducing the bureaucracy required to register an investment project. Its most important guarantee is non-discrimination for foreign investors. Essentially, it legally mandates that foreign investors be treated the same as domestic ones in every capacity. 

In line with the Law of Investment, the Law on Commercial exchange outlines the types of business vehicles that you can use. This includes Private Limited Companies, Branch Office or Representative Offices. It was recently amended in 2022 to further modernize corporate governance and simplify registration processes at the Ministry of Commerce.

Sectors Where 100% Foreign Ownership is Permitted

Under the Law on Investment (2021), the Cambodian government explicitly permits 100% foreign ownership in almost every industry. Cambodia uses a Negative List, allowing you to participate in all sectors except those prohibited or restricted under Sub-Decree No. 111.

This means you can register a Private Limited Company (the most common vehicle), appoint yourself as the sole director, and hold all the shares without needing a Cambodian “placeholder” or partner.

Here are examples of sectors where you can have 100% foreign equity in Cambodia. 

• Manufacturing: Garments, footwear, electronics, automotive parts, and light assembly.
• Professional Services: Consulting, legal (with restrictions on practicing Khmer law), IT, hospitality, and tourism.
• Import/Export Trading: General wholesale and retail trade (subject to specific product registrations).
• Social Infrastructure: Private schools, vocational training centers, and healthcare clinics.
• Technology & Innovation: Fintech, e-commerce, software development, and digital payment platforms.

Read more about how you can establish a Private Limited Company within these sectors. Our experts in Cambodia can help you streamline this process. 

Sectors that are Prohibited and Restricted Under the Negative List

Category A: Prohibited Activities

These are sectors that are completely off-limits to all investors whether local or foreign  as per Negative List Annex 1, Section 1. Certain activities are deemed harmful to public health, national security, or the environment, and are strictly closed to both foreign and domestic private entities:

• Production or processing of psychotropic substances and narcotic substances.
• Production of poisonous chemicals, agricultural pesticides/insecticides, and other goods using chemical substances.
• Manufacture of weapons for private use. 
• Manufacturing, assembly, or installation of electronic cigarettes and similar electronic smoking devices (under C.12.15 in the industrial sector).

Category B: Restricted/Conditional Activities

These are sectors where foreign investors are still allowed but cannot own 100% of the equity. To enter these markets, you either need to have a local partner with a majority stake of your company under a Joint-Venture structure. 

Here are some notable sectors:

• Land Ownership (49% Cap): By Constitutional law, a company owning land must be at least 51% owned by Cambodian citizens. This ensures that the sovereign territory of the Kingdom remains under the ultimate control of its people.
• Media and Press: To protect national identity, cultural integrity, and information security, foreigners are generally restricted from holding majority stakes in traditional newspapers, radio stations, and television broadcasting networks.
• Rice Milling and Primary Farming: Rice is the primary staple and a cultural symbol. Primary rice cultivation and the initial milling processes are restricted to protect millions of small-holder farmers from being displaced by foreign industrial conglomerates.
• Freshwater and Maritime Fishing: Traditional “catch” fishing in Cambodian waters is largely reserved for local communities. The government aims to prevent over-exploitation and ensure that the protein sources for the local population are managed by Cambodians.
• Gemstone Mining: The extraction of precious stones (rubies, sapphires, zircons) usually requires local equity participation and specific state authorization to ensure the nation’s finite resources are not entirely extracted for external profit.

Category C: Excluded from Investment Incentives

Some sectors are perfectly legal for a foreigner to own 100%, are excluded from receiving the tax holidays or duty exemptions associated with Qualified Investment Project (QIP) status. Common examples include:

• Retail and Wholesale Trade: Small-scale shops, general showrooms, and basic distribution.
• Tourism Services: Travel agencies, simple restaurants, and bars.
• Small-scale Professional Services: Basic accounting, simple consulting, and beauty/wellness services.
• General Construction: Basic residential or small-scale commercial building projects.
• Simple Manufacturing: Low-tech industries that do not meet the minimum investment capital or technological thresholds set by the CDC.

Operational Pathways for Restricted and Non-Incentivized Sectors

If your investment falls into Category B (Restricted) or Category C (Non-Incentivized), you must use specific legal structures to remain compliant with the Negative List. 

The 51/49 Joint Venture for Category B

For restricted sectors (specifically those involving land ownership) you must find a Cambodian partner to hold at least 51% of the equity. Using a Shareholder’s Agreement, you can veto rights over critical decisions and establish different share classes where you can retain higher voting or dividend rights. Emerhub can help you draft this agreement. 

If your project requires land, the LHC is the mandatory vehicle. To protect your investment in an LHC, you should secure the title via a Hypothec (a registered mortgage) and enter into long-term leases (up to 50 years, renewable) that grant you exclusive control over the property’s use.

Non-QIP 100% Foreign-Owned Company for Category C

For Category C sectors (like retail or construction), you can legally own 100% of the shares, but you are disqualified from tax incentives. You can register as a Private Limited Company directly with the Ministry of Commerce. However, you skip the CDC application and proceed immediately to commercial registration. 

Because you don’t have QIP status, you are subject to the standard corporate income tax (20%) from year one, as they do not receive the “Profit Tax Holiday.”

Why You Must Avoid Nominee Structures

You should avoid using nominee structures where a local is paid to put their name on your land or business paperwork. The Cambodian government has increased audits of shareholder identities to prosecute nominees in the country. 

The risk is if your nominee defaults or attempts to seize your assets, you will have no legal standing to recover it. This is because the underlying contract is under the nominee and specifically created to circumvent constitutional law. 

To help you navigate through Cambodia’s Negative List, Emerhub can act as your guide when you start a company in the Kingdom. We can help you register your company with the Ministry of Commerce (MoC), apply sector-specific licenses, and keep you in the loop with regulation updates. 

Want to know if your sector is under the Negative List? Contact our local experts in Cambodia for a free consultation.